ARTICLE
25 September 2024

Trademark Ownership And What Happens To Your Trademark When You Die?

As folks prepare their estate documents, they need to consider who they want to receive their assets, house(s), vehicle(s), or that Bob Ross painting they found at a garage sale 20 years ago...
United States Intellectual Property

As folks prepare their estate documents, they need to consider who they want to receive their assets, house(s), vehicle(s), or that Bob Ross painting they found at a garage sale 20 years ago. What many people don't think about is what will happen to their trademark after they pass away, assuming they own a business in whole or in part.

In determining how you should prepare to handle the rights in your trademark (or "mark"), assuming you own a business, it is critical first to ascertain if the trademark is owned by you, as an individual, or if it is owned by an entity. In most cases, it is owned by an entity and is a business asset of the entity, divisible like any other business asset. If your entity owns the trademark, then your death likely only impacts the ownership of the mark to the same extent as it impacted the ownership of the business as a whole. Whoever the trademark owner is, the trademark remains valid only as long as it is being used and under the same product or service parameters as it was registered under with the USPTO.

Now, what happens if an individual individually owns a mark for a business enterprise? In most circumstances, it is advised that the business enterprise be the actual owner of the mark. However, in the situation where an individual individually owns the mark, you must determine if the individual mark-owner is licensing the mark to the business as the business. Or is the CEO claiming to own the mark and allowing the business to use the mark without a license in place? This latter situation is, technically, constructively an abandonment. If this is not corrected during the life of the mark owner, hopefully, it will be upon its testamentary disposition. When a business is larger than one person, the business owner can own the mark, but only as part of the remaining business property. This then means that the business co-owner(s) or partner(s) might own a part of the mark that is part of the proportion of the business that they own, but they do not own the mark apart from the business because U.S. law does not permit that. The surviving co-owners trademark rights in the business should have been addressed in the same document that disposes of the deceased owner's shares in the business.

If an individual individually owns the trademark, there are additional risks to be aware of. Most important are the issues of abandonment and cancellation. Remember, trademarks rely on their use – and occasional maintenance (if registered) – to remain valid. As a (mortal) individual owner of a trademark and the sole operator of your business, your biggest worries upon your death are the cancellation or abandonment of your mark because your services can no longer be performed.

For example, if the business is a solo musician and the musician passes away, who can perform the business, i.e., the music performance? A personal services contract terminates if the personal service provider passes away because that type of contract is not usually transferrable or assignable. In such a business, the passing of this single operator would legally have to be an abandonment of the mark unless the musician's estate plan provides for the succession of the business. And if the business is abandoned, then the required maintenance for your mark to remain valid, namely the Declaration of Continuing Use, can no longer be filed. If the individual owner fails to adhere to the maintenance filing timeline and due dates, the USPTO will cancel the trademark registration.

When the individual owner of a mark dies, that mark will be considered a business asset, and subsequent ownership will be determined given the circumstances of the handling of the owner's estate concerning that business. For example, if the mark and business are identified in the decedent's will, then ownership of both would transfer according to the directions laid out in the will. If there are no directions left, then, just like other assets, the rights to the mark will be handled through the probate process.

When determining what happens to your mark upon your demise, it is important to decide not only who ends up with the trademark assets but also who should own the business associated with the mark because the two legal properties are inseparable and any separation of the mark from the business jeopardizes losing the rights in the mark. Determining whether an individual owner or an entity is best suited for ownership of your mark is dependent on the circumstances and intentions of the mark owner and who the mark owner intends to continue with the business. Consequently, just as it is important to express your wishes regarding what you would like to happen with your "things" upon your death, you must decide who will be the next owner of the business and how you can ensure that the mark transfers with the business and any registrations, therefore, continue to be valid or updated.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Mondaq uses cookies on this website. By using our website you agree to our use of cookies as set out in our Privacy Policy.

Learn More